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Grow Your Business Technology

What is Near-Field Communication (NFC)?

Most business travelers are clueless when it comes to mobile payment systems Google Wallet allows for tap-and-go payments. / Credit: Image courtesy of Google

Near-field communication (NFC) is a technology that allows a smartphone to communicate with other devices via short-range radio transmissions. It may someday replace everything you carry in your wallet or purse, and even your key ring, by allowing tap-and-go payments.

Nokia, Sony and Philips teamed up in 2004 to create a universal standard for near-field communication technology. However, the technology behind NFC is much older, based upon the simple relationship of magnetism and electricity.

As electrons flow through a conductor, they create a magnetic field. As changes occur in this field, electrons alter in their flow accordingly, creating inductive coupling. Radio frequency identification (RFID), a predecessor to NFC, is another application of inductive coupling.

NFC builds upon this technology, but for a shorter range of communication.

Purchasing items just by holding your smartphone close to a receiver at a cash register is just one application of the NFC chip. In addition to removing the need to carry credit cards, with the right smartphone and apps you can do everything through your phone, from running your car to unlocking your front door.

NFC technology also works quite well from a direct marketing standpoint. Posters can be designed to include NFC chips in the form of tags or stickers. When a consumer views the poster and wants to know more, they can just hold their phone up to the chip and receive additional information.

An NFC reader app activates the NFC signal, creating a weak magnetic field within the phone and making it an active NFC device. The phone decodes the signal as a link to a website or even a video of a band.

In 2011, Google launched Google Wallet and Google Offers, applications that play to the strengths of NFC technology and replace your physical credit card as well as customer loyalty cards. ISIS, a partnership of AT&T, T-Mobile and Verizon entered the mobile-payment market in 2012. Other NFC apps are designed to speed up productivity and simplify everyday tasks.

While NFC technology isn’t included in every smartphone out there, many popular models succeeded in making this form of radio transmission into something more than a fad. The technology is included in all Google Nexus devices, the Motorola Droid Razr Maxx, and all Samsung Galaxy devices. The Samsung Galaxy S3 marketed the ability to transfer images and videos between devices, and since then the capability increased in prevalence throughout the world.

As is the case with all technology, NFC isn’t without its own inherent design flaws. While NFC transmissions take place over a very short range — about 4 inches (10 centimeters) or less — other eavesdropping devices could pick up the transmission from much farther away, even up to 20 feet (6 meters).

If you used your smartphone at a cashier, this could be potentially dangerous and give away information to access your credit card account. However, if two NFC devices transmit information between one another, this would succeed in confusing any eavesdroppers simply because the intruder wouldn’t be able to differentiate which device is sending what information due to the close proximity.